Business and market environment
This past year has thrown up real challenges, not least a slowing economy and the worsening effects of climate change. Our own sector continued to face significant skills shortages. There were also new opportunities to be found in changing social attitudes, increased digitalization and a shift to more sustainable business models. Trust – among both businesses and the public – again proved to be imperative for the sector. Below are the key external factors that have affected our organization.
Trust has always been the most important topic for our sector. Ethics violations, such as answer sharing related to mandatory training tests, have affected KPMG N.V. and the professional services sector in general. Trust is something that has to be continuously maintained, and these violations have shown again the importance of integrity and maintaining the highest possible ethical standards across our business.
Trust in the professional services sector declined in 2023 from 66% to 63%, which means that the sector is trusted (rather than neutral or distrusted).
Edelman 2023 Trust BarometerClimate change is increasingly impacting both the environment and society. That brings serious risks to our clients, like possible disruption to supply chains and scarcer resources. Increasingly, companies are expected to disclose the effects of their activities on society and climate change mitigation. But climate change also brings opportunities as companies switch to cleaner technologies and develop new, more sustainable business models.
Dutch CO2 emissions dropped by a further 9% in 2022, with significant reductions in both the manufacturing and buildings & construction sectors.
Statistics NetherlandsOur society is fundamentally changing. In the Netherlands, we are growing older, and more of our working-age population has a non-Dutch background, which will rise to over 40% by the middle of the century. At the same time, digital technology is altering the way we live our lives. Politically, we are more polarized. But there is also more awareness of the importance of fairness and diversity – and the need for employers to build safe and inclusive working environments.
Currently, more than a quarter of the working-age population in the Netherlands has a non-Dutch background – this is forecast to rise to 42% by 2050.
Netherlands Interdisciplinary Demographic InstituteIn the Netherlands, economic growth slipped back in 2023 in line with most other European economies. Inflation continued to put pressure on costs and wages, both for ourselves and our clients. Meanwhile, a new government will bring a change in political priorities. By the end of 2023, inflation had begun to ease, though the Dutch economy remains subject to wider geopolitical tensions, not least over the continuing war in Ukraine.
Economic growth in the Netherlands declined to just 0.9% in 2023, down from 4.5% the previous year.
Organization for Economic Cooperation & Development (OECD) economic snapshotSkills shortages are being felt across the economy, and the professional services sector is no exception. It has become increasingly difficult to find skilled auditors and tech professionals, for example. To attract talent, companies are putting more emphasis on learning, development and career opportunities; offering a more open, inclusive working environment; and hiring from the international labor market.
Attracting and retaining talent is the number one CEO concern worldwide.
The Conference Board, C-Suite Outlook Report, 2023For several years, businesses have been digitalizing their operations. More are making use of Cloud technologies, big data and AI. The result is greater efficiency, lower operating costs, and more emphasis on online commerce. At the same time, digitalization brings greater competition and increased cybersecurity risk, while use of AI also comes with ethical dilemmas such as discrimination and a lack of human control.
So far, only 13% of Dutch companies have adopted AI, but the figure is rising.
EU Digital Economy & Society Index, 2022Oversight is increasing – we are seeing new regulations in our sector in areas such as accounting standards and ESG reporting. More scrutiny is being put on the auditor’s role in combating fraud and non-compliance. In the Netherlands, the Authority for the Financial Markets (AFM) is steering toward more data-driven supervision.
By the time it is fully implemented, the EU’s new Corporate Sustainability Reporting Directive (CSRD) will apply to around 50,000 companies.
EU Commission
- 1 From 66% to 63%, which means the sector is trusted (rather than neutral or distrusted).